PURCHASED SERVICES
Third-party purchased services heavily influenced by rising cost of labor Multiple categories experiencing cost increases hit hard in past 12 months
Conductiv CEO Chris Gormley recently spoke with The Journal of Healthcare
Compensation Index report, which mea-
Contracting ( JHC ) about third-party purchased services expenses, the use of labor in the
sures how salaries, wages and benefits are
healthcare marketplace during and after the pandemic, and key strategies for providers
changing over time – and total compensa-
to tap into for purchased services. Conductiv is a consolidated subsidiary of Premier
tion spiked 1.3% spike in the third quarter
Inc. and was founded in 2004 to help organizations negotiate contracts for regionally
of 2021 alone. Year-over-year, compensa-
sourced services.
tion rose 3.7%, the fastest annual growth rate since 2004. This means that suppliers are having to factor in higher wages to help attract and retain talent on top of higher prices for their business, such as fuel costs. Based on these factors, some categories experiencing cost increases, include:
ʯ ʯ ʯ ʯ ʯ
Staffing Blood Products Courier Services Waste Management New Construction
These categories have been heavily affected by a rise in fuel costs, the labor market and supply chain issues.
JHC: What are hospitals and health
Right now, it’s a very competitive
systems conveying about expenses
market for all labor types. Workers across
One mitigating factor is contracts
such as third-party purchased servic-
the country have left their jobs in waves
that prevent or limit price increases over
es? Are those expenses on the rise?
as they reevaluate new options that didn’t
time – and for those systems heading into
If so, how is that affecting providers?
exist in a pre-pandemic environment.
an upcoming contract renegotiation/bid
Gormley: When comparing third-party
Hospitals are feeling this everywhere
effort, it’s important to exercise great care.
purchased services to products, the total
from small services like pest control to
With deep subject matter expertise,
cost of the service is heavily influenced
larger spend areas, such as construction
a broad view across categories, and in-
by the cost of labor. Due to this, the ser-
and nurse staffing.
novative technology that gives providers
vices market has been hit particularly hard during the past 12 months.
4
The U.S. Bureau of Labor Statistics
powerful insights to analyze, benchmark
recently released its quarterly Employment
and source competitive contracts, both
December 2021 | The Journal of Healthcare Contracting
